HELENA — The average price of health insurance policies offered on Montana’s new insurance “marketplace’ this fall — a key aspect of the federal health reform law — won’t be a sticker shock for consumers, Montana’s insurance commissioner says.
In fact, state Auditor Monica Lindeen said late Monday that an analysis by her office shows that policies for individuals and businesses will be less expensive than projected rates without the law, often known as “Obamacare.”
“A lot of Montanans have been worried about how Obamacare would affect the cost of health insurance,” Lindeen said in a prepared statement. “These preliminary figures show that rates haven’t skyrocketed.
“Rates are actually lower than projections, which is a relief to a lot of Montanans, including me.”
Lindeen’s office hired an actuary to analyze health insurance policies submitted to her office by the three companies that will sell those polices on the electronic marketplace in Montana, starting Oct. 1.
The marketplace is an Internet shopping site where consumers can choose from a range of policies — and get subsidies to help pay for the policy, if they earn anywhere from 100 percent to 400 percent of the federal poverty income level.
The policies will be effective in 2014, when all Americans are required to buy or already have health insurance, or pay a tax penalty.
The marketplace is a central component of the 2010 Affordable Care Act, which seeks to expand health coverage to most Americans.
Lindeen’s office said for an individual buying a policy on Montana’s marketplace, the average monthly cost of the submitted policies is $273 a month.
Without the Affordable Care Act, the same policies would have cost about $290 a month, the actuary estimated.
The “average” individual is a 40-year-old consumer. Policies for younger consumers would be less expensive and those for older consumers more expensive.
Lindeen’s office also provided a range of prices for the policies, based on age of the buyer.
For 25-year-olds, the price would range from $141 to $299 a month, depending on how generous a plan they chose to buy. Consumers buying the low-end policies would have higher out-of-pocket costs, such as higher deductibles.
For 55-year-olds, the price of a policy on the marketplace would range from $313 to $664 per month, Lindeen said.
She also noted that those prices do not include any offsets from subsidies that eligible buyers would receive.
Policies purchased by small businesses on the marketplace, to cover their employees, will see an even better relative savings, compared with the market without the Affordable Care Act, the actuarial analysis said.
The average monthly cost for a small-business policy bought on the marketplace will be about $375 per employee per month, the analysis said. The price is higher than the individual policy because business policies tend to cover more costs, Lindeen’s office said.
Without the Affordable Care Act, those policies would have averaged $450 per employee per month, the analysis said.
Lindeen noted that many had expected the policies to be more expensive, because, under the law, they must offer a set of “essential health benefits” and insurers cannot turn away or charge more for unhealthy people.
However, the analysis shows that the products sold on the marketplace will cover more services and more people, yet still cost less than policies sold without ACA rules, she said.
Insurers offering the policies — Blue Cross and Blue Shield of Montana, PacificSource and the new Montana Health Co-op — hadn’t seen Lindeen’s analysis Monday evening and declined to comment.
Lindeen is scheduled to present a report on the analysis and other insurance market information to a legislative committee Tuesday.